DALLAS — A Navy Federal Credit Union member has filed a proposed class-action lawsuit alleging the nation’s largest credit union violated federal lending laws by failing to provide specific reasons for denying his application for credit, according to reporting by Courthouse News.
The lawsuit, filed in the U.S. District Court for the Northern District of Texas, was brought by Dominic Castleberry, who claims Navy Federal Credit Union improperly denied his application for a line of credit and provided only a vague explanation that cited “limited credit experience.”
Castleberry alleges the explanation failed to meet the requirements of the Equal Credit Opportunity Act (ECOA), which requires creditors to provide applicants with specific reasons when adverse action is taken on a credit application.
‘Limited Credit Experience’
According to the complaint, Navy Federal informed Castleberry that his application was denied because of “limited credit experience” but did not identify the factors underlying that determination.
“Defendant failed to specify why the plaintiff had ‘limited credit experience’ and what factors were relied upon,” the complaint states. “Accordingly, plaintiff was unable to address or correct the alleged deficiencies that defendant based its denial on.”
The Equal Credit Opportunity Act, a federal civil rights law, prohibits lenders from discriminating against credit applicants on the basis of certain protected characteristics and requires creditors to provide applicants with a statement of specific reasons when credit is denied.
Castleberry contends Navy Federal has a broader practice of issuing insufficient adverse-action notices and “systematically deprives consumers of information they are entitled to under the ECOA.”
Class Action Sought
The lawsuit seeks class-action status on behalf of consumers nationwide who, within the last five years, received adverse-action notices from Navy Federal that cited “limited credit experience” as the reason for denying credit.
Navy Federal Credit Union, which has approximately $203.5 billion in assets and more than 15 million members, is the largest credit union in the world.
Castleberry is represented by attorney Timothy Hogan of Sulaiman Law Group in Lombard, Illinois.
According to Courthouse News, Navy Federal did not immediately respond to a request for comment on the lawsuit.
